Talking to mediapersons here, Lalli alleged gross irregularities and nepotism in allocation of tenders for upgradation, modernization and installation of co-generation in the eight mills, resulting in huge losses to the state exchequer and rendering the Co-operative Sugar mills (CSMs) across the state incapable of being self- sustaining.

He charged Majithia with indulging in favouritism in order take over all the Cooperative Sugar Mills in the garb of value addition through co-generation.

The total estimated loss from 2010-11 - the year in which these projects should have been operational - till now is Rs. 915 Crores, which is mounting by the day and would continue to increase till the time co-generation plants are put up and made functional, said Lalli, demanding a Special Investigation Team (SIT) to be set up to probe the multi-crore scam and bring the guilty to book.

The tenders were floated by SUGARFED, Punjab on behalf of 8 CSMs of Punjab in 2008. Lalli alleged that M/s Saraya Industries Limited (SIL), a family unit of Bikram Singh Majithia, misused his official clout and obtained the contracts for four mills directly and four in the name of another company i.e. A2Z.

Cooperative Sugar Mills had been facing financial constraints, and to get the mills out of this financial mess it was decided to go in for co-generation for increasing revenue of the mills, he said, adding that tenders were floated in the year 2008, of which SIL bagged orders for Nawanshahr, Ajnala, Batala and Gurdasprur and A2Z for Morinda, Budhewal, Nakodar and Fazilka.Tenders received from SIL were conditional and not as per terms of notice inviting tenders (NIT) and hence should have been rejected there and then. The earnest money deposited by these 8 mills amounting to Rs. 3 Crore should also have been forfeited.

The Memorandum of Understanding (MOU) was executed with SIL on 12 January 2009, as per which the SIL and A2Z had to deposit a security amount of Rs. 2 Crore with each of the eight CSMs by 11 April, 2009, but SIL and A2Z did not deposit a single penny. Hence, MOU was liable to be cancelled at this stage itself.

In addition, M/s SIL and A2Z were also required to contribute towards modernization and ungradation of sugar mill machinery so as to make its functioning more efficient and fit for synchronization with co-generation plant, which they also defaulted on.

The story did not end here. In order to safeguard and get the Earnest Money Deposited (EMD) refunded, which SIL had deposited for those three mills where they could not start work of co-generation, SIL filed arbitration cases with Registrar Cooperative Societies Punjab for cancellation of MOU and refund of Earnest Money Deposited (EMD).

Tajinder Singh Virdi, the then Additional Registrar Cooperative Societies, under coercion from Bikram Singh ordered for release of 80% of EMD in gross violation of MOU terms and also ordered cancellation of MOU. Claims of the CSMs for losses incurred, minimum charges of Rs 1.25 Crores per annum, as well as its impact on the financial viability of the mills on account of additional expenditure incurred by the mills on repair and maintenance, salary, fuel, and purchase of hydel, were completely ignored.

Lalli further alleged that Sugarfed Punjab, which is the apex body for CSMs in the state, pressurized these units not to file appeals against the patently illegal and arbitrary orders passed by Additional Registrar Cooperative Societies.He also said that out of four projects undertaken by SIL, only one co-generation plant at Nawanshahr was initiated by SIL, which is also under installation, though around seven years have lapsed.

Lalli said had these plants started operations as per the terms and conditions of the Agreement, CSMs would have been able to earn revenue to the tune of Rs. 668 Crores, which would have enabled the sugar mills to make timely payments to sugarcane farmers from their own resources without having to beg from the state government. The mills had to further suffer loss of Rs. 245 Crores over a period of seven years on account of salaries, repair and maintenance, fuel and purchase of hydel due to non-installation of co-generation plants by SIL and A2Z.

Lalli also alleged that initially these projects were to be run by SIL and A2Z on BOT (Built Operate and Transfer) basis for 15 years after expiry of which these plants were to become the sole property of CSMs, and had it happened, these units would have become an economically viable and profit making proposition, thereby generating employment. CSMs would then also have been able to pay off the dues of sugarcane growers in time, he added.